Do Your Customers Pay With a Smile?

Collecting money is one of the least favorite tasks for a small business owner. Many contractors would rather avoid the awkwardness and just send a bill. This can really hurt cash flow, considering how much you have tied up in a typical installation. Getting your money at the end of a job doesn’t have to be a painful experience. Actually, it can be quite rewarding if handled properly.

I recently had a conversation on this subject with one of our members. He mentioned that sales and profits were at an all-time high, but he was having a bit of a cash flow problem.

Service wasn’t an issue, since most paid by check or credit card at the time of service. The problem was with some residential installations where customers were slow pays once they received the bill at the end of the job. I was astonished his company mails a bill and waits for payment. I wondered, “If he’s doing this, how many others are too?”

So if you’re not getting paid at the end of each job, I’d like to share a painless process that kept my collections at the end of every job at 100% — with a smile!

This process actually starts when the sale is made. Upon getting the customer’s signature on the contract, and collecting the customary 13 to 12 down payment (you are getting at least 13 down, aren’t you?), you then explain how the job will unfold. This gives the customer a higher degree of confidence in you, as expectations are clearly set.

Begin by explaining how the work will take place, asking important questions about access, parking, pets, etc. It goes something like this:

“Mr. and Mrs. Smith, on Tuesday morning I’ll come out with our installers to get them going, and to make sure they understand your expectations along with any special nuances of the installation. At that point, I’ll leave the job in their capable hands. By the way, please don’t hesitate to call me if you have any questions about what is being done.

“Once they’re done and have cleaned up, I’ll come by to go over the system with you, review operating instructions, and answer any questions you may have. At that point I’ll pick up your check for the balance. Does that sound OK?” I’ve never received a “No” response to that question.

I always made it a habit to bring the installers coffee that first morning, and I’d roll up my sleeves and help them carry the equipment out. It’s a great way to score points with the guys, and more importantly, the customer’s confidence is now extremely high as they perceive that you haven’t abandoned them to total strangers.

When the installation is done, make sure you return soon after the installers leave. Review the system with the customer, checking to make sure you did what you promised, then collect the balance — they’re expecting you to!

This is when the fun starts. One of the sales tools I used to help increase customer confidence was a list of other satisfied customers in their neighborhood. It included the customer’s name, address, and a brief description of their installation. This was a terrific tool, as the prospect would often recognize one or two names and feel immediately at ease.

On my wrap-up visit to the home, I always asked for permission to add them to the list. Very few refused, and I always made sure to rotate the names so they wouldn’t get too many calls.

This is a powerful tool in countering what is known as “buyer’s remorse.” The customer at this point is usually thinking, “If he wants to add me to his list, he must think they really did a great job here!”

Finally, it’s always a good idea to leave them with something (besides a handful of business cards). It doesn’t have to be expensive, just thoughtful. Whenever I sold a new air conditioning system I put a $2 padlock on the electrical disconnect and handed the customers the “keys to their new system.”

I’d explain that kids get curious about what’s inside a little gray box, and we want to make sure their kids and their neighbor’s kids wouldn’t have a close encounter with a 220V line. Other niceties might include cookies, flowers, or movie tickets, but I prefer something related to their comfort system.

Besides ensuring great cash flow, this process is a terrific way to score points and get valuable referrals from your customers.

Dominick Guarinois chairman and CEO of National Comfort Institute (NCI), a national training, certification, and membership organization. NCI offers advanced training in sales, marketing, air balancing, diagnostics, design, indoor air quality, CO, and combustion efficiency. Guarino can be reached at 800/633-7058, or atdomg@ncinstitute.com. For details on training topics and schedules, and information on National Comfort Team, visitwww.ncinstitute.com.

Sometimes the great outdoors gets into an HVAC system! Other times, good contractors find total hack jobs. Our updated "Wall of Shame" gallery shows what the good HVAC guys find on the job, sometimes in new homes!

Growing a business from the ground-up can be tough. We can’t all be lucky enough to win the lottery (like some HVAC companies have), but with the proper steps and work ethic, we don’t need to strike it rich. A business can be grown organically and see a fantastic level of success.